The Russian parliament has approved a bill permitting the use of cryptocurrencies in cross-border transactions and legalizing Bitcoin mining.
Like other recent attempts, this development can be viewed as a reaction to Western sanctions that have a negative impact on Russia’s trading opportunities on the global market. Provisions for cryptocurrency mining will also come into force on 1st September 2024.
New Bill Boosts Russian Crypto Transactions
The recently passed bill permits industries to engage in trades using cryptocurrencies to avoid some barriers. It focuses on enhancing transactional processes with countries such as China, India, the United Arab Emirates, and Turkey.
Some of these countries have had challenges in trading with Russia owing to Western regulators’ probes into their local banks. Thus, using cryptocurrencies in Russia will help optimize such transactions and minimize the usage of classic financial systems.
Anatoly Aksakov, the deputy and one of the bill’s authors paid special attention to the necessity of this bill. He said,
“This legal framework makes it possible for our international trade to be very active despite the sanctions we are under.”
Furthermore, even though the government prohibits the use of cryptocurrencies domestically, this step clearly indicates a shift in focus towards using digital currencies to enhance the country’s foreign trade.
Russian Bill Strengthens Crypto Mining Oversight
The legislation outlines stringent rules on how cryptocurrency mining is to be done within the territory of the Russian Federation. It requires all operators to adhere to the government and the Bank of Russia’s supervision involving income reporting and tax contribution. This way, the government is trying to provide a proper framework and minimize the legal issues for selling the mined cryptocurrencies.
Besides these requirements, the bill banned cryptocurrency advertising and allowed these transactions outside the Russian currency regulation laws through the information infrastructure. ”We are putting in place strict measures for developing a credible mining industry,” said Aksakov, to stress the organization’s compliance with best practices and the legal framework.
US Concerned Over Crypto Evasion by Moscow
The passage of this bill poses a direct threat to the United States’ attempts to limit Moscow’s trade relations. US officials, including Treasury Secretary Janet Yellen, have recently voiced alarms over Russia’s turn to cryptocurrencies to evade sanctions.
“We are watching their use of digital currencies, although not material at this time, we are increasingly worried,” Yellen said.
This legislation shows that Russia is willing to find new ways to finance its foreign relations business during economic sanctions. Russia plans to use cryptocurrency to protect its trade routes and influence other countries in the same situation.
